This is a wonderful novel. JK Rowling's skills as a storyteller are on a par with RL Stevenson, Conan Doyle and PD James. Here, they are combined with her ability to create memorable and moving characters to produce a state-of-England novel driven by tenderness and fury. The vacancy of the title occurs when a local councillor, Barry Fairbrother, dies while in office. This is the key event that triggers the action in the superficially idyllic West Country village of Pagford, whose well-heeled inhabitants are at war with the nearby council estate, The Fields. "Nearly two-thirds of The Fields dwellers live entirely off the state and a sizable proportion pass through the doors of the Bellchapel Addiction Centre." The novel charts the struggle between "old", respectable England and the "new" underclass of the estate and it revolves around who will get the vacant council seat. It is a fierce battle – in language, in tone and in its urgency.

It is not too difficult to see certain similarities with Harry Potter. (It would be very odd if that were not the case.) Harry Potter came out of the depths of Rowling's imagination and is in the tradition of portal novels – Alice down the rabbit hole, the children finding their way to Narnia through the wardrobe and Harry through Platform 9¾ at King's Cross. Pagford, the ideal English village, is another "other" world and once you pass into it you are under its spell.

This time, however, it is grounded in current realities – drug addiction, racism, schoolboy bullying as well as the usual stiletto snobberies around the ruined abbey and the village green. Just as Rowling, in her Potter series, got liftoff from Jennings and Tom Brown and other school stories and turned them into something far darker, grander and universally compelling, so here she takes the quiet English village thought to be the copyright of Miss Marple and rebirths it entirely without caricature or wearisome stereotypes. It's a place where the fight between good and evil, between love and despair, never ceases.

As in the Potter series, even some good characters can have a streak of badness in them. Harry is a Horcrux (a vessel containing a fragment of the evil Voldemort's soul); in this novel Parminder, a virtuous doctor, is blemished by her wicked undermining of her youngest and least able daughter.

But above all, as in the Potters, there is the final redeeming grace of love. Severus Snape, who has a lifelong commitment to Harry, protects him because of his unrequited love for Harry's mother. The love in this book is for Barry Fairbrother, who was born on the unspeakable Fields estate but then moved into Pagford, a good man with a mission to integrate the children of The Fields with this privileged village. His chosen instrument for this task is Krystal Weedon, a hardcore resident of The Fields and a stunningly vivid creation. Krystal's background is utterly desperate: she has no idea who her father is; her mother is a drug addicted prostitute; her family lives in squalor. One of her dearest wishes is that they might afford to have a television set and she spends much time at school lying about the programmes she hasn't seen. One of her new friends from Pagford, who wants to be like Krystal, describes her as "funny and tough, impossible to intimidate, always coming out fighting".

When posterity wields its cleansing sword, I suspect that, just as the Harry Potter series will go on being read and cherished, so will the story of Krystal Weedon. Barry includes her in a girls' rowing eight at the comprehensive school. This is the first time anyone has taken any positive notice of Krystal and for a brief moment she thrives. Barry's goodness hovers over the book and becomes its moral touchstone, a counterpoint to the nastiness elsewhere. There's a vile character called Simon, whose domestic reign of terror over his wife and two sons echoes the fascist stratum throughout Harry Potter. Another villain is a school bully who (verbally) tortures a young Asian girl and drives her to extreme self-harm. Then we learn that he is adopted, which tempers our judgment. Screens are pulled away again and again and someone who seems simple to judge – and Rowling's characters provoke judgment – becomes more complex.

The ability to create characters who move you so much that you want to shout aloud "Don't do that!" or "Don't say that!" is rare. Krystal Weedon moved me to laughter, admiration, distaste, anger and finally, in her great battle against such unfair and immense odds, to tears. Rowling is expert in tracking through a trivial plot line (the stealing of a watch) and making it play its part along the way in the bigger game. She is a compelling organiser of debate. The arguments put forward by the Pagford loyalists against what they see as the evasive sullen rabble from The Fields are laid out with conviction, as is the opposing view.

But at other moments, she erupts into partisan rage. There's a scene where Parminder the doctor, a councillor, listens at a meeting to the "extravagantly" fat chairman condemn those in The Fields for the expense they cause to the NHS. Parminder, unwisely but uncontrollably, then spells out what this man's total refusal to lose weight has cost the NHS in heart operations, expensive drugs, constant appointments and so on. There are moments, too, of utterly bleak comedy, such as when Terri, Krystal's mother, whose council house is a rubbish dump, attempts to defend her patch against the predators from the social services.

One mark of Rowling's determination to get to the nerve of reality in this book is her vigorous use of industrial language. Fs are everywhere, Cs are not withheld. But it never feels gratuitous.

Rowling has spoken of the sense of risk in embarking on this novel. The Harry Potter series must have been a tough act to follow. What she wanted to do here, I guess, was to seize on the world we can all see without going through Platform 9¾. She has done that to stunning effect.